Wal-Mart's earnings is retail's messiest bag thus far

Retail earnings are a mixed bag yet again. Wal-Mart reported earnings in line with expectations, but it wasn't a great report. Traffic was down 1.1 percent, though higher average ticket helped. Full year guidance got cut by 25 cents, or about 5 percent, with management citing higher U.S. healthcare costs and more investment in Web assets.

Are people really shopping at Walmart.com? Well, eCommerce sales rose 24 percent year over year, and are up a respectable 27 percent from the prior quarter. Have you looked at the website recently? They are offering a much greater selection, and it's much easier to navigate around the site. They have in-store pickup as well.

Kohls was better, at $1.13 earnings that was a six cent beat over consensus, though revenue was a tad light. The big takeaway is that sales appear to have improved as the quarter went on; they did post a positive comparable store number for July. Guidance was unchanged.

International jitters have forced another historic move down in bond yields. The yield on the German 10 year-bund dropped below 1 percent this morning, prompting a flurry of "did you see this" comments from traders.

Elsewhere

Wal-Mart's results will continue to improve: Pro

John Lawrence, MD of Stephens, expects the approaching holiday season to give Wal-Mart's store sales and profits a lift.

"There is just so much liquidity out there," one hedge fund manager messaged me. "I really don't see how the inflows to bonds and sitting in cash is going to continue."

But it is. One fund manager's survey, I am told, noted that cash levels were at two-year highs.

That's Germany. It's even sillier in Spain where a 26 percent unemployment rate has pushed 10-year yields to 2.5 percent —essentially identical to U.S. interest rates.